Direct marketing: the basics
Introduction
Direct marketing is any unsolicited contact your business makes with existing or potential customers in order to generate sales or raise awareness.
For many businesses, it’s by far the most cost-effective form of marketing. From direct mail and leaflet drops to telemarketing and email marketing, it allows you to target customers with accuracy.
However, careful preparation of direct-marketing campaigns is essential if you are to make the most of your investment and get the response rates you want. You need to ensure you do not contact individuals who have decided they do not want to receive direct marketing mailings.
This guide sets out the different types of direct marketing and outlines the advantages and disadvantages. It gives details of current legislation and industry best practice, and tells you where to get more help and information on both.
Why use direct marketing?
Direct marketing allows you to generate a specific response from targeted groups of customers. It’s a particularly useful tool for small businesses because it allows you to:
focus limited resources where they are most likely to produce results
measure the success of campaigns accurately by analysing responses
test your marketing – you can target a representative sample of your target audience and see what delivers the best response rates before developing a full campaign
A direct marketing campaign can help you to achieve the following key objectives:
increasing sales to existing customers
building customer loyalty
re-establishing lapsed customer relationships
generating new business
There are many different approaches to direct marketing. These include mailshots and telemarketing, email marketing, SMS marketing and social media. The method most appropriate for your business will depend on who you are targeting, the message you want get across and response you want to generate.
The results of direct marketing aren’t guaranteed. A poorly planned or targeted campaign can be a waste of money. A badly designed mailshot, for example, could simply end up in the bin. And worse still, it may irritate recipients and damage your business’ reputation as a result.
Advantages and disadvantages of direct marketing
Direct marketing can have pros and cons. Consider these carefully before starting a campaign.
Benefits of direct marketing
Some of the strengths of direct marketing include:
Targeting: You can send specific messages to particular groups of customers and potential customers based on demographics and buying behaviour. The more targeted your campaigns, the more successful they are likely to be.
Personalisation: Reach your audience with a personal touch. Direct mail or email can be addressed to a specific person, and even include details like past orders. A phone call can engage a customer in conversation to start building a relationship with your business.
Affordable: Tactics like email marketing or leafleting can be very cost effective. Most direct marketing will be more cost effective for SMEs than mass media advertising campaigns.
Measurable: If your marketing messages ask the recipient to take a particular action or use a specific voucher code, you can easily track the success of campaigns. This can help you plan future campaigns.
Informative: You can deliver detailed information on your products, services and prices unlike other forms of advertising.
Challenges of direct marketing
Some of the downsides and hurdles to overcome when using direct marketing include:
Intrusive: Many people find direct marketing annoying and intrusive. This is especially true of telemarketing and door-to-door sales. Some people dislike marketing mail and consider it to be junk mail. If consumers find your marketing tactics annoying it can create a negative brand association and make them less likely to buy. This is more likely with less targeted campaigns.
Environment: Using leafleting or paper-heavy direct mail campaigns can be bad for the environment. To avoid this, and any negative impact on your brand image, use recycled materials or try email campaigns.
Low response rates: direct marketing response rates tend to be around 1-3%.When you reach a consumer who isnt interested in your products of services, it wastes money and they are likely to find it irritating. Use more targeted lists as opposed to sending out mass messages to minimise this.
Competition: It can be hard to make your messages stand out when the recipient receives high number of marketing emails or direct mail.
Cost: Tactics like telemarketing and direct mail may have high financial and resource costs.
Legal issues: There are laws relating to privacy and data protection in direct marketing. You must ensure that your mailing list only contains individuals who have consented to receive marketing messages from you.